OP Pohjola Group s Interim Report 1 January 31 March 2012

Transcription

1 OP Pohjola Group s Interim Report 1 January 31 March 2012

2 OP-Pohjola Group Year-on-year results Quarterly figures Capital adequacy Balance sheet Loans and customer funds Customers, owner-members etc. 5-year trends Contents

3 OP Pohjola Group

4 OP Pohjola Group Structure, Ownership Base and Division of Responsibilities OP-Pohjola Group some 200 Group member banks Retail banking OP-Pohjola Group Central Cooperative Group control Supervision Risk management Strategic holdings ownership 100 % 37% shareholding *) 61% of votes 16% shareholding 14% of votes Pohjola Group Corporate banking Markets Non-life insurance Asset management Central banking ownership 100 % ownership 100 % 76% ownership OP-Services Ltd Product and service development Support functions OP Mortgage Bank Mortgage banking 9% ownership OP Life Assurance Company Ltd Life insurance 15% ownership Credit institutions within OP-Pohjola Group are liable for each other s debts and commitments. OP-Pohjola Group is supervised by FSA on a consolidated basis. *) Includes shareholding of 0.26% by OP-Pohjola Group Central Cooperative's subsidiary, OP Life Assurance Company Ltd

5 OP-Pohjola Group Business Segments Banking Cooperative banks, Helsinki OP Bank Plc, OP-Kotipankki Oyj, OP Mortgage Bank and OP Fund Management Company Ltd. Pohjola Group's Banking and Asset Management segments OP Bank Group Mutual Insurance Company Non-life Insurance Pohjola Insurance Ltd, Eurooppalainen Insurance Company Ltd, A-Insurance Ltd and Seesam insurance companies in the Baltic countries Life Insurance OP Life Assurance Company Limited Other operations OP-Pohjola Group Central Cooperative, OP- Services Ltd and Pohjola's Group management

6 OP-Pohjola Group Key Indicators Q1/2012 Q1/2011 Change, % Q1-Q4/2011 Earnings before tax, million Banking Non-life Insurance Life Insurance Returns to owner-members and OP-bonus customers, million Ratio of capital base to minimum of capital base 31 March March 2011 Change, % 31 Dec * 1.80 Core Tier 1 ratio, % * 14.0 Non-performing receivables/ loan and guarantee portfolio Joint banking and insurance customers (1000) * ,329 1, ,299 *Change in ratio

7 Joint Liability, Deposit Insurance and Investors Compensation 7 Under the Laki talletuspankkien yhteenliittymästä Act (the Act on the Amalgamation of Deposit Banks), the amalgamation of the cooperative banks comprises the organisation s central institution (OP-Pohjola Group Central Cooperative), its member credit institutions and the companies belonging to their consolidation groups as well as credit and financial institutions and service companies in which the above-mentioned entities together hold more than half of the total votes. The central institution s members at the end of the report period comprised OP-Pohjola Group s member cooperative banks as well as Pohjola Bank plc, Helsinki OP Bank Plc, OP Mortgage Bank and OP-Kotipankki Oyj. OP-Pohjola Group s insurance companies and OP- Services Ltd do not fall within the scope of joint liability. By virtue of the Act on the Amalgamation of Deposit Banks, the central institution has both the right to control its credit institutions and the obligation to supervise their operations. The amalgamation of deposit banks is supervised on a consolidated basis. As laid down in applicable law, the member credit institutions and OP-Pohjola Group Central Cooperative are ultimately jointly and severally liable for each other s debts and commitments Deposit banks belonging to OP-Pohjola Group, i.e. its member cooperative banks, Pohjola Bank plc, Helsinki OP Bank Plc and OP-Kotipankki Oyj, are regarded as a single bank with respect to deposit insurance. Under legislation governing the Investors Compensation Fund, OP-Pohjola Group is also considered a single entity in respect of investors compensation.

8 Year on year Results

9 300 million OP-Pohjola Group Earnings before Tax /2011 Net interest income Insurance business* Impairment losses on receivables Expenses Investments** Other items Net commissions and fees 1-3/2012 *) Life and Non-life Insurance **) Investments = Life insurance s investment income (excl. derivatives hedging technical provisions) and Non-life insurance investment income + Net trading and investment income

10 OP-Pohjola Group Income Statement Net interest income Other income Personnel costs Other expenses Impairments of receivables Returns to owner-members and OP bonus customers Earnings before tax 1 January to 31 March million 400

11 OP-Pohjola Group Other Income Net income from Non-life Insurance Net income from Life Insurance Net commissions and fees Net trading and investment income Other operating income January - March million

12 OP-Pohjola Group Income Statement million Change 1 January to 31 March million % Interest income Interest expenses Net interest income Impairments of receivables Net interest income after impairment losses Net income from Non-life Insurance operations Net income from Life Insurance operations Net commissions and fees Net trading income Net investment income Other operating income Personnel costs Other administrative expenses Other operating expenses Returns to owner-members and OP bonus customers Share of associates' profits/losses Earnings before tax

13 OP-Pohjola Group Income Statement by Business Segment 1 January to 31 March 2012 million Banking Non-Life Insurance Life Insurance Eliminations and Other Operations Total Net interest income Net income from non-life insurance Net income from life insurance Other income Total income Personnel costs Other expenses Total expenses Impairment losses on receivables Returns to owner-members Earnings before tax Cost /income ratio, % 55

14 OP-Pohjola Group Earnings before tax by Business Segment Banking % Non-Life Insurance % Life Insurance % 1-3 / 2012 Eliminations and Other Operations -29 % / 2011 million

15 OP-Pohjola Group Banking Net interest income Impairment losses on receivables Other income Personnel costs Other expenses Returns to owner-members Earnings before tax milion / /2011

16 OP-Pohjola Group Non-life Insurance Insurance premium revenue Insurance claims and benefits Net investment income Unwinding of discount and other items Total net income Other income Total expenses Earnings before tax million / /2011

17 OP-Pohjola Group Life Insurance Premiums written Net investment income.. Of which unit-linked Claims incurred Change in insurance contract liabilities Other items Total net income Other income Total expenses Earnings before tax million / /2011

18 Quarterly Figures

19 OP-Pohjola Group Quarterly Performance 2011 million Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Net interest income Other income Total income Personnel costs Other expenses Total expenses Impairments of receivables Returns to owner-members and OP bonus customers Earnings before tax

20 OP-Pohjola Group Other Income by Quarter million Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Net income from non-life insurance Net income from life insurance Net commissions and fees Net income from trading and investments Other income Total

21 OP-Pohjola Group Net Interest Income and Net Commissions and Fees 300 million Q1 Q2 Q3 Q4/11 Q1 Q2 Q3 Q4/12 Net interest income Net commissions and fees

22 OP-Pohjola Group Net Income from Non-life and Life Insurance 160 million Q1 Q2 Q3 Q4/11 Q1 Q2 Q3 Q4/12 Net income from non-life insurance Net income from life insurance

23 OP-Pohjola Group Net Income from Trading and Investments 40 60million Q1 Q2 Q3 Q4/11 Q1 Q2 Q3 Q4/12 Net income from trading Net income from investments

24 OP-Pohjola Group Expenses million Q1 Q2 Q3 Q4/11 Q1 Q2 Q3 Q4/12 Personnel costs Other administrative expenses Other operating expenses

25 OP-Pohjola Group Quarterly Impairments of Receivables 40 million Q1 Q2 Q3 Q4/11 Q1 Q2 Q3 Q4/12

26 OP-Pohjola Group Earnings before Tax 250 million ROE 15% % 150 9% 100 6% 50 3% 0 Q1 Q2 Q3 Q4/11 Q1 Q2 Q3 Q4/12 Return on equity (ROE), % 0%

27 OP-Pohjola Group Earnings before Tax at Fair Value million ROE Q1 Q2 Q3 Q4/11 Q1 Q2 Q3 Q4/12 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% Return on equity at fair value, %

28 OP-Pohjola Group Loans and Deposits 70 billion Q1 Q2 Q3 Q4/11 Q1 Q2 Q3 Q4/12 Loans (excl. loans granted from Goverment funds) Deposits

29 OP-Pohjola Group Life Insurance Savings and Capital in Mutual Funds 16 billion Q1 Q2 Q3 Q4/11 Q1 Q2 Q3 Q4/12 Insurance savings Capital in mutual funds

30 300 million OP-Pohjola Group Non-life Insurance Premium Revenue (IFRS) Q1 Q2 Q3 Q4/11 Q1 Q2 Q3 Q4/12

31 100 million OP-Pohjola Group Direct GIIPS sovereign debt exposure 09/11 12/11 03/12 09/11 12/11 03/12 09/11 12/11 03/12 Life Insurance Non-life Insurance Banking and Other Operations Greece Italy Ireland Portugal Spain

32 Capital Adequacy

33 Two Capital Adequacy Ratios Consolidated capital adequacy = capital adequacy of the amalgamation of cooperative banks Capital adequacy ratio (under the Act on the Supervision of Financial and Insurance Conglomerates) = OP-Pohjola Group s capital adequacy The Group's operations are based on the Act on the Amalgamation of Deposit Banks that came into effect on 1 July The Act on the Amalgamation of Deposit Banks prescribes a minimum capital requirement for an amalgamation of cooperative banks. This is calculated using the provisions in the Act on Credit Institutions. The amalgamation of cooperative banks consists of the amalgamation's central institution (OP-Pohjola Group Central Cooperative), its member credit institutions and the companies belonging to their consolidation groups. Although OP-Pohjola Group s insurance companies do not belong to the amalgamation of the cooperative banks, investments made in them have a major impact on capital adequacy calculated in accordance with the capital adequacy regulations for credit institutions. OP-Pohjola Group is a financial and insurance conglomerate, pursuant to the Act on the Supervision of Financial and Insurance Conglomerates. The conglomerate is governed by specific provisions of the capital adequacy requirement. OP-Pohjola Group's capital adequacy pursuant to the Act on the Supervision of Financial and Insurance Conglomerates is calculated using the consolidation method, whereby assets included in capital resources but not included in equity capital, under the regulations for the banking or insurance industry, are added to the equity capital in the conglomerate's balance sheet. Capital resources may not include items not available for covering the losses of other companies belonging to the conglomerate. The financial and insurance conglomerate's minimum capital requirement consists of the credit institutions' consolidated minimum capital requirement and the insurance companies' joint minimum operating capital. In view of both capital adequacy requirements, OP-Pohjola Group's risk-bearing capacity is strong.

34 Tier 1 Capital under the Act on Credit Institutions 31 March million , Equity capital Other Core Tier 1 capital items Deductions from Core Tier 1 capital Investment in insurance companies and financial institutions Impairments - shortfall of expected losses Core Tier 1 capital

35 Total Capital Base under the Act on the Supervision of Financial and Insurance Conglomerates 31 March ,000 million. 8,000 6, ,024-1, ,000 6,642 6,574 2,000 0 Equity capital Cooperative capital, hybrid capital, perpetual bonds and debenture bonds in total Goodwill and intangible assets Equalisation provision Other items included in equity capital and business segment specific items, but not included in the conglomerate s capital base Conglomerate's total capital base

36 6,000 5,000 The amalgamation of the cooperative banks Capital Resources and Capital Adequacy million % , ,000 2, , /03/ /06/ /09/ /12/ /03/ Core Tier 1 capital resources Hybrid capital Tier 1 ratio, % Core Tier 1, % Dec. 2011: Effect of IRBA adoption around 2.6 percentage points

37 Adopting the Internal Ratings Based Approach In its calculation of capital requirement for credit risk, OP-Pohjola Group phased in the Internal Ratings Based Approach (IRBA). Pohjola Bank plc has used IRBA in its capital adequacy measurement for corporate and institutional customers credit risks since 30 September OP-Pohjola adopted IRBA to credit risk for other exposures in December The capital requirement for credit risk concerning state and central banks will continue to be calculated using the Standardised Approach. The same will apply to market risks. The use of the Internal Ratings Based Approach reduces the Group's capital requirement, but makes it more susceptible to market fluctuations. Adoption of IRBA improved capital adequacy under the Act on Credit Institutions by 2.6 percentage points.

38 Balance Sheet

39 100 billion OP-Pohjola Group Key Balance Sheet Items Balance sheet Loans Deposits Debt securities issued to the public 31 March March 2012

40 million OP-Pohjola Group Balance sheet 31 March March 2011 Change million % Receivables from credit institutions 971 1, Financial assets at fair value through profit or loss Receivables from customers 61,646 57,131 4, Non-life Insurance assets 3,628 3, Life Insurance assets 7,227 7, Investment assets 8,688 7, Other items 11,317 6,789 4, Total assets 94,063 84,996 9, Liabilities to credit institutions 2,039 1, Liabilities to customers 45,845 38,743 7, Non-life Insurance liabilities 2,940 2, Life Insurance liabilities 7,243 7, Debt securities issued to the public 20,125 19, Other liabilities 9,230 7,935 1, Equity capital 6,642 6, Total liabilities and equity capital 94,063 84,996 9,

41 OP-Pohjola Group Equity Capital and Cooperative Capital 31 March 31 March Change million million % Share of OP-Pohjola Group's owners Share capital Cooperative capital Fair value reserve Other reserves 2,652 2, Retained earnings 3,557 3, Minority interest Total equity capital 6,642 6, Cooperative capital not included in equity capital

42 OP-Pohjola Group Debt Securities Issued to the Public Maturity 31 March 2012 total of 20.1 billion

43 Loans and Customer Funds

44 OP-Pohjola Group Deposits by Customer Sector 31 March % 32% Households Corporate and public sector entities *) Agriculture and forestry 63% *) incl. entrepreneurs

45 OP-Pohjola Group Loans* by Customer Sector 31 March % Households 34% Corporate and public sector entities**) Agriculture and forestry 61% *) incl lease assets **) incl. entrepreneurs

46 OP-Pohjola Group Loan and Guarantee Portfolio by Sector million 31 March March 2011 million Change, % million Non-performing and zero-interest loans % of loan and guarantee portfolio Enterprises and housing associations 22,480 20,495 1, % Renting and operation of residential real estate incl. housing associations 4,413 3, % Other renting and operating of real estate 2,828 2, % Wholesale and retail trade 2,377 2, % Construction 1,666 1, % Services 1,607 1, % Transportation and storage 1,445 1, % Manufacture of machinery and equipment (incl. services) 1,285 1, % Buying and selling of own real estate 1, % Financial and insurance services % Agriculture, forestry and fishing % Forest Industry % Metal Industry % Food Industry % Energy % Chemical Industry % Other manufacturing % Other industries % Public corporations and non-profit organisations 1,158 1, % Households 40,489 38,054 2, % Adjustments Total 64,160 59,613 4, %

47 OP-Pohjola Group Non-performing and Zero-interest Receivables 31 March million Others 4 million Corporates and housing associations 127 million Households 207 million

48 6.0 6 billion 5 OP-Pohjola Group New Loans by Quarter 2011: 19.6 billion 2012: 4.8 billion Q1 Q2 Q3 Q4/11 Q1 Q2 Q3 Q4/12

49 OP-Pohjola Group Net Sales Inflow of Mutual Funds by Quarter 200 million 2011: million 2012: -641 million Q1 Q2 Q3 Q4/11 Q1 Q2 Q3 Q4/12

50 300 million OP-Pohjola Group Life and Pension Insurance Premiums Written by Quarter 2011: 811 million 2012: 198 million 0 Q1 Q2 Q3 Q4/11 Q1 Q2 Q3 Q4/12

51 Customers, Owner members etc.

52 OP-Pohjola Group Breakdown of Customer Base 5,000 1,000 customers 4,000 3,000 2,000 1, /05 12/06 12/07 12/08 12/09 12/10 12/11 03/12 Non-life insurance customers Bank and non-life insurance cust. Bank customers

53 10,000 8,000 No. OP-Pohjola Group Net Increase in Owner-members by Quarter 2011: + 27, : + 8,210 6,000 4,000 2,000 0 Q1 Q2 Q3 Q4/11 Q1 Q2 Q3 Q4/12

54 OP-Pohjola Group s Personnel 31 March ,412 (+ 793 within 12 months) Other OP- Pohjola; 2,224 (change +153 ) Pohjola Group; 3,410 (change +350) Member cooperative banks incl. Helsinki OP Bank; 7,778 (change +290)

55 OP-Pohjola Group Service Network 31 March 2012 Change from yearend 12-month change eservices Agreements 1,573,035 14,339 60,906 Locations providing both banking and insurance services Private banking locations OP-Kiinteistökeskus estate agents Online customer terminals

56 5 year Trends

57 OP-Pohjola Group Earnings before Tax and Return on Economic Capital 700 million % 21,0 18,0 15,0 12,0 9,0 6,0 3, /2012 0,0 Earnings before tax Return on economic capital (12-month rolling), %

58 1,400 million 1,200 1, OP-Pohjola Group Earnings before Tax /2012 Earnings before tax Earnings before tax at fair value

59 1,400 million OP-Pohjola Group Income 1,200 1, /2012 Net interest income Net commissions and fees Other income

60 OP-Pohjola Group Impairments of Receivables 210 million % / Impairments of receivables % of loan and guarantee portfolio

61 OP-Pohjola Group Non-performing loans 400 million /03/ % 0.60% 0.50% 0.40% 0.30% 0.20% 0.10% 0.00% Non-performing loans Zero-interest loans % of loan and guarantee portfolio

62 The amalgamation of the cooperative banks Capital Base and Capital Adequacy Ratio 6.0 billion % /03/ Tier I capital resources Capital adequacy ratio, %

63 100 billion OP-Pohjola Group Balance Sheet /03/2012

64 OP-Pohjola Group Customer Funds 70 billion /03/2012 Deposits Life insurance savings Mutual funds

65 OP-Pohjola Group Loans and Deposits 70 billion /03/2012 Loans (excl. loans mediated from Treasury funds) Deposits

66 2,000 million 1,800 1,600 1,400 1,200 1, OP-Pohjola Group Premiums Written in Life and Non-life Insurance /2012 Premiums written in life insurance Premiums written in non-life insurance

67 Thank you